The Reserve Bank of India said foreign investors will be allowed to buy up to Rs 275 billion($4.13 billion) in additional sovereign debt starting next month, as part of its previously announced plan to allow increased overseas investments.

The RBI said foreign institutional investors will be allowed to buy up to Rs 105 billion in government bonds from April 4 and up to 100 billion from July 5, according to a release on Tuesday.

Foreign investors would also be allowed to buy up to Rs 35 billion in state government debt for each of those two periods, the RBI said.

The planned additional investments are part of the RBI's announcement in September to gradually increase foreign investment in sovereign debt markets by March 2018. As part of the announcement, the RBI also said it would allow any of the unutilised limits reserved for long-term foreign investors such as central banks by the end of the first half of the fiscal year to be opened up to all investors in the second half.

Currently, 80.51% of the limit available for long-term investors is used up, while the limit for foreign institutional investors is almost used up, as per data from National Securities Depository Ltd.

Foreign investors have turned buyers of Indian government and corporate bonds this month, with $319.2 million in net purchases after selling a net $1.3 billion in February.